Billionaire Ira Rennert agrees to $150M settlement of Peru smelter claims

Billionaire Ira Rennert agreed to pay $150 million to resolve more than a thousand claims that a lead smelter owned by his companies poisoned residents of a Peruvian town, reaching a deal on the eve of a US trial that was nearly two decades in the making.

Attorneys for residents of La Oroya, Peru, said they’d reached the accord just as the first set of lawsuits over the smelter’s pollution was headed to trial June 29 in St. Louis. The settlement with Rennert’s company, Doe Run Resources Corp.,  resolves almost a third of the suits filed by people living in the Andean highlands town who were seeking billions of dollars in damages.

Doe Run said the settlement covers suits by more than 1,380 La Oroya residents who’d alleged long-term health problems from smelter emissions and tainted water. That suggests each person who agreed to the deal would get about $109,000. However, almost 3,000 claims remain unresolved, according to the lawyer handling those cases, which have no trial dates. 

The billionaire’s wealth — estimated at $6.6 billion — was expected to be featured at the trial that had been scheduled next week. The 92-year-old industrialist is best-known for owning the largest mansion on the Hamptons on Long Island. 

“This resolution is the culmination of 19 years of relentless work to obtain justice for children who were innocent victims” of the smelter’s emissions, Jerome Schlichter, a lawyer for the Peruvians, said in a press release late Tuesday announcing the deal.

Doe Run officials decided to settle the cases to put the long-running environmental issue behind them and “focus on what matters — running our business, serving our customers, and investing in new technologies for the future,” Chief Executive Officer Matthew Wohl said in a statement Tuesday.

Production boost

The first La Oroya suits were filed in 2007 by Catholic nuns who worked with poor children in Peru. They alleged Rennert executives reneged on promises to clean up pollution at the smelter site, which had operated since 1922. Rennert’s companies bought it from the Peruvian government in 1997 and immediately ramped up production, court filings show.

Wohl said Doe Run invested more than $300 million to improve conditions in La Oroya and reduce emissions, but that Peru “abdicated its responsibilities” to clean up the site. Doe Run’s lawyers also argued residents’ claims should be litigated in Peru, but the suits were allowed to proceed in the US after a long legal fight. 

Children who lived near the smelter were exposed to toxins including arsenic, cadmium and sulfur dioxide, along with lead that the smelter belched into La Oroya’s air and water, the plaintiffs alleged. Nine of 10 kids had lead levels in their bodies that could cause permanent ailments, according to a 2005 Saint Louis University study cited in court filings.

The cases are being litigated in federal court in St. Louis because Doe Run is based in the city. Its parent company, Renco Group, is based in New York. The firms operated the La Oroya smelter over a 10-year-period until it sought bankruptcy protection in 2009. In 2023, the plant reopened under control of worker-owned Metallurgical Business Peru SAA, which isn’t involved in the cases.

In court filings, Rennert complained La Oroya residents improperly sought to make his wealth the main issue in the first trial. His attorney, Jennifer Saulino, told US District Judge Catherine Perry at a June 9 pre-trial hearing that any reference to Rennert’s wealth — “his wife’s jewelry and furs and his house — would only serve to inflame the jury.” 

Realtor.com notes his Sagaponack mansion – valued at $425 million and known as “the house that ate the Hamptons” – boasts 29 bedrooms and 39 bathrooms. It includes a basketball court, pool, two tennis courts, and a movie theater with a 164-seat capacity. It also has a 100-car garage.

The case is AOA v. Doe Run Resources Corp., No. 11-cv-00044-CDP, US District Court for the Eastern District of Missouri (St. Louis) 

(By Jef Feeley, Carla Samon Ros and Tim Bross)